Cecily Zamora
In 2016, Pennsylvania introduced a 40% tax on the wholesale value of electronic nicotine delivery systems (ENDS) products. This tax is paid by the retailer and has been the subject of controversy, with vape shop owners fearing that it will put them out of business and reduce the availability of ENDS products for adult smokers. Despite these concerns, a study found that there was a net increase in the number of vape shops in the 18 months following the introduction of the tax. In addition to the ENDS tax, Pennsylvania also has a tax on smoke-free tobacco and restrictions on the sale of flavored vapor products.
| Characteristics | Values |
|---|---|
| Definition of electronic cigarette | An electronic oral device, such as one composed of a heating element and battery or electronic circuit, or both, which provides a vapor of nicotine or any other substance and the use or inhalation of which simulates smoking. |
| Definition of tobacco products | (1) Electronic cigarettes, (2) Roll-your-own tobacco |
| Sale of vapor products to persons under age | 21 (under age 18 if a military member or veteran) |
| Flavor Bans | Federal law prohibits the sale of closed system devices containing non-tobacco or non-menthol flavored e-liquid |
| Philadelphia flavor restrictions | Non-tobacco flavored and high nicotine vapor products restricted to adults-only stores |
| Vapor products taxed at | 40% of the purchase price, paid by the retailer |
| Tax on smoke-free tobacco | 55¢ per ounce, with a minimum tax per package of 66¢ |
| Excise tax | 40% of the retailer's purchase price |
| E-liquid with or without nicotine | Taxed |
| Personal vaporizers (e-cigs) with e-liquid | Taxed |
| Components, parts, accessories | Taxed only if sold in the same packaging as a device that includes e-liquid |
| E-cigarettes in schools | Prohibited in schools, on school vehicles, and on school property |
| E-cigarettes in coal mines | Prohibited within surface and underground areas of coal mines |
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What You'll Learn
Vape tax rate in PA
In Pennsylvania, vape products are taxed at a rate of 40% of the wholesale value, paid by the retailer. This tax applies to electronic nicotine delivery systems (ENDS) products, including e-liquid with or without nicotine and personal vaporizers (e-cigs) with e-liquid. The tax is collected and paid by wholesalers, increasing the cost for retailers when purchasing new inventory.
Pennsylvania enacted this substantial ENDS tax in October 2016, with the aim of reducing the use of these products, especially among adolescents. A minor is guilty of a summary offense if they purchase or attempt to purchase a vapor product. The sale of vapor products to persons under the age of 21 (or under 18 if a military member or veteran) is prohibited.
Philadelphia has specific restrictions on the sale of flavored vapor products and nicotine levels. Flavored vapor products and nicotine levels over 20 mg/mL are restricted to adults-only stores.
The impact of this tax on the vape shop industry in Pennsylvania has been mixed. Some shop owners and industry advocates feared that the tax would put them out of business and reduce the availability of ENDS products for adult smokers seeking harm reduction. However, a study found that there was a net increase in the number of vape shops in the 18 months following the new tax law. This suggests that while some vape shops may have closed due to the tax, other market forces and regulatory non-compliance may also have played a role.
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Impact of vape taxes on vape shops
In Pennsylvania, vapor products are taxed at a rate of 40% of the purchase price, paid by the retailer. The tax on smoke-free tobacco is 55 cents per ounce, with a minimum tax per package of 66 cents.
The impact of these vape taxes on vape shops in Pennsylvania has been mixed. On the one hand, some sources claim that the tax has led to the closure of many vape shops in the state. The Vapor Technology Association estimates that more than 100 of the state's 400 vape shops have closed since the tax was implemented. This is supported by the observations of Myk Londino, manager of Vape O2 in Philadelphia, who noted that many vape shop owners had to close their businesses and take up other jobs to make ends meet.
On the other hand, a study published in the National Center for Biotechnology Information (NCBI) found that the number of vape shops in Pennsylvania increased despite the strong new taxation. This study used the Yelp business-listing platform to track vape shop prevalence in the state, comparing listings to state records of OTP retail licenses.
The discrepancy between these findings may be due to the different methodologies used to assess the impact of the vape tax. The Vapor Technology Association and Myk Londino's estimates are based on anecdotal evidence and personal observations, while the NCBI study used a more systematic approach by analyzing business listings and retail licenses.
Overall, while the vape tax in Pennsylvania has had a significant impact on vape shops, with some businesses struggling to stay afloat and others closing down, it is difficult to determine the exact number of shops that have been affected without more comprehensive data. Some vape shops have had to make significant changes to their business models, such as cutting profit margins and increasing prices, to accommodate the tax and remain operational.
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Flavored vape restrictions
Federal law in Pennsylvania prohibits the sale of closed-system devices, such as pods and cartridges, containing e-liquid in flavors other than tobacco or menthol. This restriction aims to reduce the appeal of vaping to younger individuals by limiting access to flavored vape options.
Philadelphia, a major city in Pennsylvania, has taken additional steps to restrict the sale of flavored vapor products. The city mandates that non-tobacco flavored and high-nicotine vapor products can only be sold in adults-only stores. This regulation has significant implications for retailers, potentially discouraging out-of-state online vendors from shipping their products to the state.
The state has also imposed taxes on flavored vape products. A 40% wholesale tax is levied on electronic nicotine delivery systems (ENDS), which include flavored vaporizers and e-cigarettes. This tax is collected by wholesalers and passed on to retailers, resulting in increased costs for consumers. The tax policy was enacted in October 2016 and has faced opposition from vape shop owners and industry advocates, who argue that it threatens their businesses and reduces the availability of harm reduction alternatives for adult smokers.
In summary, Pennsylvania has implemented flavored vape restrictions through sales prohibitions and taxation. These measures aim to curb the appeal of vaping, especially among adolescents, by limiting access to flavored vape products and increasing their cost. While these regulations carry the potential to impact the vaping industry negatively, they are designed to address public health concerns surrounding the growing use of ENDS, particularly among younger individuals.
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Age restrictions on vape purchases
In Pennsylvania, it is illegal for retailers to sell tobacco products, including cigarettes, cigars, and e-cigarettes, to anyone under the age of 21. This is in line with federal law, which prohibits the sale of tobacco and vape products to anyone under 21. The Pennsylvania Department of Health offers free online training for tobacco retailers to ensure compliance with these regulations and to prevent sales to minors.
The state passed Tobacco/Vapor 21 in November 2019, which came into effect in July 2020. This law makes it a summary offense for minors to purchase or attempt to purchase tobacco or vapor products. The sale of vapor products to persons under the age of 21 (or under 18 if a military member or veteran) is prohibited in Pennsylvania.
In addition to age restrictions on purchases, Pennsylvania has also implemented regulations around the use of vape products in certain public spaces. For example, the use and possession of e-cigarettes are prohibited within surface and underground areas of coal mines, and electronic cigarettes are prohibited in schools, on school vehicles, and on school property.
The taxation of vape products in Pennsylvania has been a topic of discussion, with the state enacting a 40% wholesale tax on electronic nicotine delivery systems (ENDS) products in October 2016. This tax has been controversial, with some arguing that it puts specialty retailers out of business and reduces the availability of ENDS products for adult smokers. However, a study found that there was a net increase in the number of vape shops in the 18 months following the new tax law, although a significant number of these shops were operating without valid retail licenses.
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Vaping in indoor public spaces
In Pennsylvania, vaping laws and their taxation have been a subject of discussion and legislative action. The state has implemented various regulations and taxes on vapor products, with an aim to curb their use and protect public health.
When it comes to vaping in indoor public spaces in Pennsylvania, the Clean Indoor Air Act (CIAA) is the relevant legislation. The CIAA, enacted in 2008, regulates smoking in public places and workplaces across the state, with the exception of the City of Philadelphia. The Act defines a “public place" as an enclosed area serving as a workplace, commercial establishment, or a place where the public is invited or permitted. This includes, but is not limited to, educational facilities, food service establishments, and healthcare-related services.
While the CIAA primarily focuses on smoking, it is important to note that some municipalities in Pennsylvania have taken additional steps to include vaping in their indoor air regulations. For example, Philadelphia and Alleghany County have ordinances that prohibit vaping in indoor public spaces where smoking is prohibited. This includes outdoor spaces in Philadelphia.
The use and possession of electronic cigarettes are specifically prohibited in schools, on school vehicles, and on school property owned or leased by or under the control of a school district. Additionally, there is a ban on the use and possession of e-cigarettes within the surface and underground areas of coal mines.
The sale of vapor products is also regulated, with a requirement for a license or permit. Philadelphia has additional restrictions, limiting the sale of flavored vapor products and nicotine levels over 20 mg/mL to adults-only stores.
In summary, while Pennsylvania's CIAA does not specifically prohibit the use of vapor products in indoor public spaces, certain municipalities within the state have taken the initiative to include vaping in their smoking prohibitions. It is important for individuals to be mindful of local ordinances when using vapor products in indoor public spaces in Pennsylvania.
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Frequently asked questions
In 2018, a court ruled that the tax can only be applied to e-liquids and devices that include e-liquid. The tax rate is 40% of the purchase price, paid by the retailer.
The tax law has been viewed as a threat to the business and livelihood of vape shop owners. However, a study found that there was a net increase in the number of vape shops in the 18 months following the new tax law.
The sale of vapor products to persons under the age of 21 (or under 18 if a military member or veteran) in Pennsylvania is prohibited. Philadelphia restricts the sale of flavored vapor products and nicotine levels over 20 mg/ml to adults-only stores.
